Mounting outage and repair costs, combined with delays and doubts related to regulatory approval for restart plans, led the utility to cut its losses, executives said. The plant previously produced nearly one-fifth of the region’s power — enough to supply 1.4 million Southern California homes.

“We have concluded that the continuing uncertainty about when or if San Onofre might return to service was not good for our customers, our investors, or the need to plan for our region’s long-term electricity needs,” said Ted Craver, CEO of Edison International, the parent company of the plant operator.

Though the plant has been sidelined since Jan. 31, 2012, the final decision came as a surprise Friday morning to plant workers, activists who fought the plant and surfers riding the ocean waves within view of the reactor domes.

An angler fishing off the beach near the San Onofre Power Plant.
— Nelvin C. Cepeda

An angler fishing off the beach near the San Onofre Power Plant.
— Nelvin C. Cepeda

John Capone of Mission Viejo said he was disappointed the plant operator did not hold out longer to solve the problem. “We have to be careful (with safety), but I guess I’m a little disappointed,” he said.

Billions of dollars have been set aside for the plant’s dismantling, a decades long process that will sustain hundreds of jobs at the plant site in northern San Diego County.

Spent nuclear fuel will remain on the site indefinitely, as the U.S. government wrestles with where the nation’s radioactive waste can be safely stored for centuries to come.

Edison has trimmed about 730 positions at the plant since December to about 1,500 workers. In coming months, personnel will be reduced to 600 as the plant is taken out of active operation, and then 400 as it is dismantled, Edison said.

It was unclear how many of those are direct employees of Edison or contractors, and whether the clean up might eventually create new jobs.

Other power plants, mostly natural gas-fired, have quenched Southern California’s demand for electricity since the outage began, as the state rapidly expands solar and wind generation.

San Diego and southern Orange counties have been left somewhat vulnerable to supply disruptions should extreme hot weather combine with major transmission or power plant failures, said Stephen Berberich, president of the state’s main grid operator.

Edison had hoped to restart the plant at partial power to dampen damaging vibrations among steam generator tubes carrying radioactive water, while evaluating long-term fixes.

That plan was dealt a major setback in May when a federal nuclear safety panel sided with a petition by the international environmental group Friends of the Earth. San Onofre’s unprecedented tube wear required a more extensive rewriting of the plant’s safety blueprint with an opportunity for trial-like public hearings, the three-judge panel of the Atomic Safety and Licensing Board said.

Facing a Friday deadline for appealing the decision to the full five-member Nuclear Regulatory Commission, Edison instead announced the retirement of San Onofre.

“It was the right decision, it was the obvious decision,” said Shaun Burnie of Friends of the Earth. “These steam generators should never have been put in there. ... The NRC should not have allowed it to happen.”

The Rosemead-based utility owns 78 percent of the plant. San Diego Gas & Electric owns 20 percent and the City of Riverside owns the rest.

Edison estimated that it would record a charge of between $450 million and $650 million before taxes in the second quarter as a result of the shutdown. State utility regulators will decide who pays for costs while the reactors were offline — utility customers or investors.

To offset costs to customers and investors, Edison said it would continue to try and recover costs from generator manufacturer Mitsubishi Heavy Industries and through the Nuclear Electric Insurance Limited, a mutual insurer for the U.S. industry.

Mitsubishi said in a statement that it was disappointed by Edison’s decision.

“We’ve continued to work closely with Southern California Edison to address all technical matters necessary to safely re-power San Onofre,” the statement read. “We remain confident that San Onofre could be operated safely and reliably.”

Edison has laid the blame largely at Mitsubishi’s feet for generator design problems traced to botched computer models and some manufacturing issues. Mitsubishi has said other standard industry computer models would not have predicted a new kind of vibrations that rendered tube braces ineffective.

Research published in leading trade magazine in 2005 and 2006 warned of the potential for those vibrations, though they had never been encountered in a working reactor.

The role of the Nuclear Regulatory Commission also remains under scrutiny. The four faulty replacement steam generators, a project that cost $768.5 million, were given prior approval despite a host of changes to their configuration.

Nuclear safety activists and politicians accused Edison of avoiding a more thorough regulatory review that might have required public hearings. Craver of Edison said that would not have made a difference.

“This is such a unique phenomenon. I’m not convinced a more thorough approval process would have uncovered the technical engineering issues,” he said. “That’s obviously the question that we’ve asked ourselves and others will ask. The best sense we have is the technical nature of that would not have been identified in a lengthier process.”

San Onofre’s operating license was set to expire in 2022. Craver said obstacles to extending that license, including calls for enhanced seismic studies after Japan’s Fukushima-Daiichi disaster, weighed in the decision to close down.

Sen. Barbara Boxer, who had asked the Justice Department to review the matter, said the plant was doomed by the generator redesign.

“Modifications to the San Onofre nuclear plant were unsafe and posed a danger to the eight million people living within 50 miles of the plant,” she said in a statement. “Now that the San Onofre nuclear plant will be permanently shut down, it is essential that this nuclear plant be safely decommissioned and does not become a continuing liability for the community.”